Skip to main content
4:00 pm
it is a big drag on the dow even though the dow is moving higher. disappointed with earnings numbers yesterday, specifically the enterprise business not looking nearly as strong. here come the closing bells. keep your eye on the bottom picture there. that's the nasdaq. [laughter] i'm sorry, what? somebody talking to me? okay. as you can see, everything is running. okay. here's where your money is at the moment. ashley: finally. liz: dow jones industrials up 67 points, but it is the nasdaq which, of course, actually had just completely stopped shortly after 12:15 eastern time. ashley: the markets remained calm and carried on, as the saying goes, and overall an interesting day. perhaps the best time it could happen would be a slow week or a slow day in august. nevertheless, we want to know what happened, and we haven't heard that yet from the folks at the nasdaq. liz: qualify at -- "after the bell" starts right now.
4:01 pm
what caused a complete blackout of trading at the nasdaq for a full three hours? at in this point the nasdaq has not given any reason. ashley: none. and there's a lot of people upset. you mentioned the word annoyed earlier. some ceos of nasdaq-listed companies, a dearth of information. why haven't we had more contact, more updates from the nasdaq? we will find out in the ensuing days, i'm sure. liz: shortly after 12:15 p.m. eastern time started some bizarre trades, looked like trading glitches. the asdaq had to halt everything for a full three hours. you're talking about a combined listing of $5 trillion in market cap of more than about 2,500 stocks that list on the nasdaq. joining us now is a man who was with us yesterday, he is the expert in these kinds of electronic trading glitches, edgar perez, author of "nightmare on wall street."
4:02 pm
nicole petallides still with us on the floor of the new york stock exchange. sandra smith in the pits of the cme where they endure massive amounts of electronic trading, liz macdonald has been speaking with traders all day, adam shapiro live at the nasdaq. to adam first. they just had the closing bell, everything seemed to be okay, lots of smiles down there. what do you think will be the fallout, and has anybody come out to talk to you? >> reporter: nobody is talking from nasdaq as of yet. it's kind of pay no attention to that man behind the curtain. almost appropriate, because the iconic tower here in times square is really a facade of marketing for what is totally electronic trading platform, and that platform today you couldn't trade because you couldn't see what you were going to bid on or the place you would ask, so you couldn't set a price. nasdaq has not put out an official statement as to what went wrong. they used the term regulatory halt, they have alluded to a technical problem with the realtime pricing. but they have said no word about any other possibilities as to
4:03 pm
what might have caused the problem. did not explain why they had a -- [inaudible] to drop the ball for three hours and really ruin the days of a lot of investors. because as you pointed out, something like 5.7 trillion in the 2200 stocks listed on nasdaq and which were not trading here at nasdaq or even other exchanges, for instance, over at the new york stock exchange they could have traded through some of these, but that did not take place, and we still don't know -- according to nasdaq, why. liz? ashley: thank you. you know, glitch just seems to be the understatement of the day when you, you know, shut down trading for three straight hours. let's go to elizabeth macdonald who's been on this since the very get go. liz, what are you hearing? >> reporter: we're trying to piece together the tick tock of what happened, and here's what traders are hearing. they're hearing it was a software glitch, basically a computer malfunction that fed erroneous data into the main quote feed meaning the securities information processer. that is where all the prices for
4:04 pm
all the exchanges are derived. so when you have the data feed posting erroneous prices, then all the exchanges had to stop trading because those erroneous prices started showing up on the main data feed. again, the securities information processer. so what we saw, what we heard from traders throughout the day was tick tock is this, that the nyse's electronic platform, arca, picked up some problematic trades and started rerouteing trades away from nasdaq. then yahoo! took a dollar price plunge in and around 12:30. intel started wavering around 20 cents a share. so, again, we're hearing a software glitch. and you rightfully, liz and ashley, point out the radio silence coming from nasdaq is really troubling to traders, because it seems to them that these glitches are happening more. but they're hearing nothing from nasdaq officially on what happened. when you had the facebook ipo
4:05 pm
problems, goldman sachs' options trades that are bombarded, erroneous trades bomb boarding the options market from goldman sachs having also a computer malfunction, knight capital about a year ago with problematic computer trades, algorithms where they were basically, you know, buying high and selling low. and you hhd also a flash freeze on january 3rd of this year that lasted for 15 minutes. the fact that this went on for three hours, the fact that you haven't heard anything from nasdaq is really troubling traders down on the floor. liz: in fact, knight capital went unnoticed for, i believe, it's about an hour. we have the expert on knight capital's disaster that, actually, really threatened the very existence of that trading operation. edgar perez is author of "nightmare on wall street." it's brand new, and goldman sachs has had a bizarre trading glitch in its options area just a day ago. tell me what you think of what happened today. >> well, first of all, i woo sad
4:06 pm
that -- [inaudible] i think that's manager that couldn't be said -- something that couldn't be said a year ago. bob greifeld, obviously, something that he didn't think at all. he cannily, he was not on a plane, so his people were working hard to make sure everything went back. but again, technology's complicated. these issues will happen, unfortunately, but what we have here is a resolution in terms of controls. and i think that's something probably that nasdaq and the regulators have to work on to avoid things like this happening not only in exchanges like nasdaq, but also in trading firms like in the case of knight capital. ashley: but, look, to err is human, to really screw up it takes a computer, and when you have all of this information all coming in very complex systems, part of the problem was the nasdaq couldn't push the old reboot, reset button because it was so interconnected with all the other exchanges.
4:07 pm
is this something we have to live with? >> no, we have to definitely review the technology. nasdaq has been in the electronic trading for 40 years, so obviously, i'm really surprised that the data feed was something that could be going wrong today. maybe it was a software glitch, maybe the data was corrupted, we don't know yet what happened really, and i think there's going to be time for us to review that. but if this really surprising that it's the nasdaq, a company that is very proud of listing huge companies like facebook, microsoft definitely had an issue that probably could have been expected with younger stocks. liz: it was very obvious with knight that they were trying to start up a brand new trading platform that was electronic. the software hadn't been tested properly, and they had nobody watched it. it happened early in the morning, it cost them $400 million and did, of course, almost cause the death of the company which then had to be taken over. do you think there's something nefarious here unlike what happened with knight which was
4:08 pm
simply software that hadn't been tested properly? >> it's really surprising, it seems like that happened on a day in august when most traders are probably on vacation. it's a slow day, lunchtime, so i think it's something very strange. but technology always has some surprises, and unfortunately, we cannot test the million combinations. what we can do, though, is once we identify these problems to stop trading which is something they did. toto be honest with you, i'm really surprised they opened the trading today. i would expect that they -- [inaudible] tomorrow and they will assure that systems will resume normally. luckily, apparently, they found the error, they were able to restart trading, and i think that's something they should at least be happy today. of course, tomorrow will be back walletting to know what was the issue and hopefully not repeating this again. ashley: let's bring in sandra smith at the cme. we've been talking since this began, and all things considered fairly calm and cool and collected overall despite what
4:09 pm
was going on at the nasdaq. >> reporter: not only calm, cool and collected, but also money was flowing into these markets today. we saw the major stock index futures finish near their highs of this session. they did sell off, particularly the nasdaq futures sold off on this news but quickly recovered. so the big takeaway that we are seeing on the trading floor here in chicago is the calm that ensued when this halt happened, ashley and liz. basically, traders down here really talking about the fact that the markets are really becoming accustomed to the fact that they are primarily electronic, there are going to be things like this that happen, and the markets are more prepared than ever. so there was certainly a calm that ensued. traders, obviously, looking at the fact that oil, gold, lots of green arrows across the screen today including the stock market, commodities across the board. and by the way, cme did tell fox business there was absolutely no impact to their exchange or to the products that trade on it. so very calm happenings here as
4:10 pm
all this unfolded. liz: what a day to come back from maternity leave. >> reporter: i know. liz: nothing like jumping right into the fire here. >> reporter: love it, love it. liz: i know you do. let's get to nicole petallides on the floor of the new york stock exchange. obviously, they were able to handle whatever volume they had, nicole, but what were traders there really whispering about? >> a platform much like we see here at the new york stock exchange which has both electronic trading and the human element, so really it catches glitches like what we saw today and handles things. someone like maureen was noting that, someone like ben willis noted who put what capital, and what were the costs? what are going to be the repercussions of what happened? what happens at the nasdaq, and will it happen tomorrow? it doesn't really build consumer confidence when you realize it's great that they opened again, to
4:11 pm
mr. perez's point. you started to wonder if they were going to open. they did, in fact, open. that's wonderful. but the question is, and i heard liz talking about soft square processers and the like -- software and processers and the like, but i'd like to see some more in-depth coverage just to build the consumer confidence so people don't really worry. liz: nicole, thank you very much. and our thanks to edgar perez, a real expert on electronic trading along with sandra smith, liz macdonald and adam schaap low row. coming up, jack lew set to take questions live in silicon valley. remember, the treasury secretary is head of the financial stability oversight council which was established to identify risks to our financial system. you can bet he will be addressing this, or he'll certainly be asked about it. what he's saying. ashley: plus, what does a big glitch like that paralyze the markets mean for you, the average investor? how will your portfolio be
4:12 pm
impacted? well, we're going to break it down for you next. ♪ ♪ liz macdonald and adam ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all onhinkorswim from td ameritrade. ♪
4:13 pm
from td ameritrade. it's been that way ysince e day you met.. but your erectile dysfunction - itld be a question of blood flow. cialis tadalafil for daily use lps you be ready anytime the moment's right. you cabe more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph like needing to go frequently or urgently. tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause unsafe drop in blood pressure. do not drink alcohol in excess with cialis. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, seek immedte medical hel for an erection lasting more than 4 hours. if you have any sudden decrease or loss in hearing or vision,
4:14 pm
or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial. ashley: we are following shares of pandora, down significantly in after hours trading despite better than expected earnings,
4:15 pm
let's head back to nicole on the floor of the nyse. >> reporter: the numbers are not good news here. the stock is trading to the downside. the closing value of 21.71, the bid-ask in the 19.50 dollar range, but i'm seeing the outlook here of the earnings per share, and it looks like 3-6 cents, and the estimates were for 6 -- for 8 credibilityings. so you do see the shares falling. i think more of this is about the weak outlook that pandora is giving, and as a result you're seeing the stock's down more than 10% today on the this news. so it's a stock that really has done so well. it's interesting, because on one hand i'm seeing they're raising the year view and then a weak outlook on another one. a mixed bag, but year to date it's about 136%. clearly, whatever's in this report going forward, people are worried about it because the stock is down over 10% right now. it's certainly one to watch
4:16 pm
tomorrow in friday's trading in addition to everything else that we'll be covering. ashley: yeah. liz: i want some good numbers. it's unfortunate, you know, they did get some listening hour numbers -- ashley: all about the guidance, though, isn't it? what have you done for me lately? liz: exactly. [laughter] ashley: nicole, thank you. liz: sounds like people we know. [laughter] and we've been talking about the nasdaq halted all trading just shortly after 12:15 p.m. eastern due to a technical problem they have not specifically identified yet. but it paralyzed the nasdaq market. so how does a huge glitch in the system which they're, hold on, we have jack lew, the treasury secretary, commenting on this very issue right though in silicon valley. ♪ ♪ >> nasdaq have been working all day on this. i've been kept informed through the day, and i'm glad to report that the markets are up and running. >> it isn't the first time
4:17 pm
something like this has happened, so do you have any sense that treasury or the white house needs to have a renewed interest in figuring out why this is happening? this, obviously, just shouldn't be happening in an advanced economy like ours. >> well, you know, technology has enormous benefits in terms of efficiency and the capacity that it lends to so many parts of our economy not just markets, but our infrastructure from communications to transportation and energy. there are inherent risks in technology that if machines break or if a natural disaster occurs or if there's some malign activity, that it could be very disruptive. we have put in place many contingency plans to deal with the foreseeable circumstances like hurricanes and things like that. we've been aggressive on the cybersecurity front, promoting public/private be partnership to make sure that information sharing and remediation methods
4:18 pm
are well understood and te ploy bl. deployable. and sometimes there are just system failures where machines break and they need to be fixed and get up and running, and you need redundancy as much as possible. i think we'll all know more of the details of exactly what caused today's disruption, but i am glad to say that the markets are up and running. >> do you have any concern that the sec is not doing its job in regulating the exchanges well enough given that, as i said, this isn't the first time? >> well, i know that after hurricane sandy in new york a lot of steps were taken to increase the level of preparedness for situations that can arise from time to time. i think until this is a full explanation -- there's a full explanation of what happened today, i want to leave the sec and the nasdaq in a position to assemble the facts. but on these questions of exposure to risks from things that can go wrong with cyber
4:19 pm
systems, it has been something that's been very much on our radar for a long time. it's very much on my radar in several roles that i've had, and i must say as i talk to business leaders, it is almost to a person what a ceo tells you they worry about the most. because it's the kind of thing where going through scenarios puts you in a better position to respond if something happens, and knowing how to get and share information is critical. so, hopefully, incidents, you know, that are transient will not cause major disruption. there's no reason, from what i know now, to believe that today's incident has any of the more frightening aspects to it. but we're going to have to learn all the facts. but i think the more general question that you ask about preparedness to deal with problems that arise from our
4:20 pm
dependence on information systems is at the core of kind of being resilient. and, you know, we have to be able to deal with machines that break, we have to be able to deal with storms, and we have to be realistic that there are going to be occasions from time to time when there are needs to respond to intrusions. and i know that it is something that's very high on our list of priorities. frankly, it's an area where we've worked to try to get legislation passed to even enhance the tools that we have. >> you mentioned risk, let's transition to a conversation about reck la story reform which is, i would say, the very top of your agenda. you and the president held a meeting with all the major regulators just this week in the white house, and the message was we're not getting enough done. there was a study that said i believe that the regulators have enacted about 40% of the rules required by the dodd-frank law which was passed three years ago and that 60 of -- 60% of the deadlines for the rules have
4:21 pm
been missed. i want you to start off outside of washington in front of a room full of business be people, how is it possible for the government to mix 60% of its deadlines? >> well, i think that the study you're referring to has certain flaws in terms of how it defines progress made and work remaining. but i don't want to get into the details of that particular study. the dodd-frank law was an enormous piece of legislation that is the most fundamental change in our financial system in 75 years. the decisions that are being made if writing the rules are -- in writing the rules are highly consequential in terms of protecting our system from future crises, from protecting taxpayers from being exposed to the kinds of risks and costs that occurred after the financial crisis, and at the same time maintaining what is the most effective financial market in the world so that we remain the world leader,
4:22 pm
financing capital expansion in the united states and the smooth, orderly business operations in the united states. i think that some of the reports on the meeting got the tone of the meeting more right than some of the other reports. it actually was a pretty impressive review of work done even in the last six months since i've been at the treasury department can, there's been mayor -- >> yeah, share with us one or two key products of the implementation so far. >> over the last three years we've increased the capital that banks has, and that's very important because that capital is what insulates, you know, the risk in that institution from the broader system, and certainly from the taxpayer being responsible. we have living wills which are if a large financial institution hits the point where it's in crisis, it has to have an orderly resolution plan which we didn't have at the time of the financial crisis. in the last few months, we've
4:23 pm
seen rules in place which define mortgage standards so the most risky kinds of mortgages that were very much at the root of the financial crisis will not be issued, certainly not be protected in any way. we've seen implementationing, the international financial rules -- not to use jargon, but the basel iii rules which, you know, the question is are we at or above -- are we above or below the world standard, we're above the world standard. i go to meetings around the world -- liz: treasury secretary jack lew with fortune's adam lashinsky is the an -- at an event in silicon valley talking specifically about the nasdaq freeze. for more than three hours the trades were halted, and while he's not blaming cybersecurity, he's leaving that to the sec and the nasdaq, but cybersecurity has been on his radar for quite
4:24 pm
some time. he said that you do have to consider things like intrusions, was his word. ashley: yep. liz: again, he backed off -- ashley: and you have to be able to respond to, as he put it, broken machines. all right, lo this. we've got chief investment strategist who says the market is vulnerable to another pullback, scout bauer is in the pits of the cme. i've heard some complaints about the lack of transparency of what happened today at the nasdaq. would you agree with those complaints? >> well, not here from the pits of the cme, because it was, you know, trading as usual here. i think that there was, you know, a little let's call it, um, question in the marketplace because of what happened with the goldman trades just the other day. and so i think that really called into question is there something more going on here, and the fact that, you know, we weren't getting news, we weren't seeing anything on twitter, we
4:25 pm
weren't seeing anything through social media what was going on definitely brought into some question. but down here on the floor it was, you know, pretty much trading as usual. liz: but we do have to look on the effect of the psychology on traders and market participants. what did you hear from your climates? >> well, liz, i mean, the issue is this isn't helping investor confidence at all. starting with the flash crash and fast forwarding through a few other events, this only compounds the issue that investors are increasingly believing it's machines running the market, and there's no human intervention, and it's really a market that's geared more to solving the institutional needs as opposed to an environment in which individual investors can expect to be rewarded for having exposed their portfolios to stocks and have days like today happen. a classic example on the nasdaq, of course, is apple, an iconic brand. and the fact that it was shut down even while carl icahn was tweeting the fact that he's going to dipper with tim cook
4:26 pm
and -- to dinner with tim cook and talking about buybacks, it's unusual. we're going to have to learn a lot more about what went on as to an effort to try to bring forward some transparency and, hopefully, calm investors' frayed nerves. ashley: that said, it was another up day for the market. you're concerned about a pullback. what's going to drive that, and how much? what are we talking about, mark? >> we think we could see a number probably 1600, maybe even down to 1550 if it gets a little bit more aggressive in terms of the equity correction. and it's largely on the back of the fact that i think equity markets are going to have to reconcile to the fact that where earnings expectations are set for all of 2013 which is just shy of $110, assumes we're going to see something close to a double-digit earnings growth rate over q3 and 4, and given the recent pattern of mid single-digit at best earnings growth, it's unlikely we're going to see that. so as those earnings expectations get marked down, i
4:27 pm
think it's going to work to derate equity prices. and i don't think it's necessarily going to be something sinister. in fact, i look at it as a healthy opportunity to step in. liz: all right. i mean, i guess in the end, scott, when we look at what's going on on all of trading floors, we do tend -- and we shouldn't forget about the individual retail trader and the fact that they are buying all different names out there, and many of them are listed on nasdaq, some are not, certainly, but what should a day like this say to all market participants? >> you know, it really becomes a frustrating day for the retail player in this game. the trader down here, that's fine. the retail guy which, you know, is what we, what us traders on the floor make our bread and butt wither off of, it's really frustrating. what it says to them is you have just got to, i don't want to say just trade in issues that are extremely liquid that have
4:28 pm
alternative hedges to it, but you need to be, you know, you need to be right on top of your -- liz: let me just interrupt you and make a point. if you look -- i'm pulling this out of the air here. haines celestial came out with incredible numbers, hain, they did wonderful numbers. they've killing the shorts who don't believe in this company, and they're a nasdaq stock, so in the middle of being up, significant double-digit percentages, boom, the whole thing comes to a halt. lucky for them, when trading did resume shortly after #u 25 p.m. eastern -- 3:25 p.m. eastern, they continued to see the gains there, up nearly 11%. but they're not anywhere near where they were at the start of session. so it's just a name like that that really is probably a bit frustrated today. mark and scott, our thanks to both of you. we really appreciate it. ashley: timing is everything, isn't it? liz: well, yes. especially, horribly, when you can't control it.
4:29 pm
we talked to former sec chairman harvey pitt about what regulators are looking at and how they are likely to respond to this huge trading disruption. ashley: and the drone revolution is a reality, and it's spreading from the battlefield to your neighborhood. we're going to be talking to chris anderson, ceo of 3-d robotics, who sees huge business opportunities in the rise of the drones. sounds like a star wars episode. my mantra? trust your instincts to make the call. to treat my low testosterone, my doctor and i went with axiron,
4:30 pm
the only underarm low t treatment. axiron can restore t levels to normal in about 2 weeks in most men. axiron is not for use in women or anye youngethan 18 or men with prostate or breast cancer. women, especiay those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all mecal conditions and medications. serious sideffects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankl feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased d blood cell count, headache, diarrhea, vomiting, and increase in psa. ask your doctor about the only underarm low t treatment, axiron. every day we're working to and to keep our commitments. and we've made a big commitment to america.
4:31 pm
bp supports nearly 250,000 jobs here. through all of our energy operations, we invest more in the u.s. than any other place in the world. in fact, we've invested over $55 billion here in the last five years - making bp america's largest energy investor. our commitment has never been stronger. liz: full tradiig at the
4:32 pm
nasdaq did resume but this after three hours of all stocks halted but what impact has this left on the markets and should we be worried this could happen again? joining us harvey pitt former securities & exchange commission chairman. harvey, we confirmed the sec is looking at that. first of all, do you hear anything or know anything? >> i know some things but not about -- what the sec is doing. liz: let's talk about the nasdaq. from what you saw today, do you feel that it was handled properly? are you concerned that there may be some nefarious groups at work here? hard to say the nasdaq still hours later has not come out with any kind of a statement. >> i'm not certain about anything nefarious but i think this was handled terribly on the part of nasdaq. it seemed as if they didn't really know how to respond to these events. they didn't have a clear
4:33 pm
statement of what was going on. and, they opened some securities ahead of others and, that left the marketplace in a complete state of disarray. i think that their handling of this was completely unacceptable. liz: well, jack lew, the treasury secretary, was just speaking. we took his comments live on the air. he happens to be out in the silicon valley. he used the word intrusion. he didn't say he knew anything, harvey, we have to look at these kind of things, we need to look at electronics, we need to be prepared for anything like this. clearly the president has been notified, clearly this may be something, does it make you think to yourself, wait a minute, just a day or two ago goldman sachs had a bizarre ghost in the machine trade? >> we're seeing this happen repeatedly.
4:34 pm
technology is wonderful but it will be subject to glitchs. the difficulty we're seeing here is the complacency of the securities industry vis-a-vis technology. the fact that it can fail, doesn't mean you abandon it. it means you have to prepare for these kinds of failures and there are things that should be done, must be done but aren't being done. in fact to the detriment of investors and our capital markets. ashley: so, harvey, what you're really saying is that these high-tech compute that's deal with so much data, there are expectations that there will be glitches but the real failure in this case was on behalf of nasdaq and the way they handled it and the lack of transparency? >> that's exactly, that's exactly right. they could easily have predicted this. after all, they went through
4:35 pm
something quite comparable with respect to facebook and they handled that one write -- quite terribly as well. >> what should they have done? now we spoke, i started working the phones, called a lot of nasdaq-listed ceo companies. half of them were pulled out of meetings. call me back now, this is important. many of them said, this is the first i'm hearing about it. let me call my ir guy, investor relations guy or woman. they came out and said they have not received any reach out, in fact one got a letter from an e-mail from bob greifeld, who of course is the ceo of the nasdaq but it was totally unrelated to anything that was happening with the glitch. >> part of the difficulty is that well-run business organization has to have a crisis management plan. although crises arise and they seem to be haphazard,
4:36 pm
almost every business can plan for almost any crisis sis. there may have been crisis planning at nasdaq but today's events don't demonstrate that any of it was effective, if it in fact existed. so crisis planning is crucial. part of crisis planning is transparency. the people who list their shares on nasdaq have a right to know what the exchange is going to do when something like this hits. investors have the right to know what's going to happen with their orders that they placed. the securities & exchange commission has the right to know. the nasdaq is going to take very effective steps to cabin any such crisis and deal with it immediately. so crisis management is step number one. step number two is, there
4:37 pm
has to be an upgrading of software and continuous checking of the software. you can't check software, quarterly or semiannually or annually. you have to be in there checking software repeatedly. and third, you need redundancy plans. if something is going to shut down your technology, or a portion of it, you have to have another methodology in place to enable you to keep the market running or to get back up and running much quicker than the three hours that nasdaq was down. liz: harvey, they should pay you to come in to help them figure out how to handle it the next time. thank you so much for joining us. >> my pleasure. liz: harvey pitt, the former chairman of the securities & exchange commission saying in essence, quite frankly the nasdaq handled this, quote, terribly. ashley: blew it basically.
4:38 pm
we're talking about the impact of another subject on rising rates on the market. not just stocks are getting hit rates rise. we're breaking down the impact on the economy. we're telling you what investors should be focusing on next. join us at projectluna.com
4:39 pm
4:40 pm
i've been doina few things for playing this and trading.ove-- tdd#: 1-800-345-2550 and the better i am at them, the more i enjoy them. tdd#: 1-800-345-2550 so i'm always looking to take them up a notch or two. tdd#: 1-800-345-2550 and schwab really helps me step up my trading. tdd#: 1-800-345-2550 they've now put their most powerful platform, tdd#: 1-800-345-2550 streetsmart edge, in the cloud. tdd#: 1-800-345-2550 so i can use it on the web, where i trade from tdd#: 1-800-345-2550 most of the time. tdd#: 1-800-345-2550 which means i get schwab's most advanced tools tdd#: 1-800-345-2550 on whatever computer i'm on. tdd#: 1-800-345-2550 it's really taken my trading to the next level. d#: 1-800-345-2550 i've also got a dedicated team of schwab trading specialists. tdd#: 1-800-345-2550 they helped me set up my platform the way i wanted, it's really taken my trading to the next level. tdd#: 1-800-345-2550 from the comfort of my home. tdd#: 1-800-345-2550 and we talked about ideas and strategies, one on one! tdd#: 1-800-345-2550 really gave my trading a boost. tdd#: 1-800-345-2550 all this with no trade minimums. tdd#: 1-800-345-2550
4:41 pm
and only $8.95 a trade. tdd#: 1-800-345-2550 after all, i'm in this to win, right? tdd#: 1-800-345-2550 open a schwab account and learn how you can earn up to 300 tdd#: 1-800-345-2550 commission-free online trades for 6 months tdd#: 1-800-345-2550 with qualifying net deposits. tdd#: 1-800-345-2550 call 1-888-283-2407 today. tdd#: 1-0-345-2550 ashley: everyone is focusing on nasdaq outage of course. by the way, 10-year treasury yields hitting new two-year high following the release of those fed minutes yesterday afternoon. in turn, 30-year fixed mortgage rates rising to new two-year highs. liz: some say to yourselves i don't own bonds, what does it matter to me? rising rates can have impact on all americans. joining us blue putnam, chief economist at the cme. most people have treasurys somewhere in their portfolios but let's talk first about the overall effect, sort of broader picture of rising yields. >> well, you know, you get rising yields right now because the fed had this
4:42 pm
asset purchase program. it caused yields to go down when they otherwise might not have been as low. they will eventually get rid of it, probably in 2014. you know the markets anticipate things so the yields are going back up. they're going back to normal. liz: normal. ashley: what is normal? % and above? i mean, where do you see the rates going? >> well, typically bond yields would be a little bit above the inflation rate. inflation rate is almost ashley: right. >> a little over 1%. you know i have no idea where they're going, but they were definitely too low at 2%. liz: we've seen market moves, in the market but not by historical standards but important moves, in, for example the 30-year mortgage rate. then you start to see the reaction. wells fargo laying off a bunch of mortgage originator guys. there you start to see the domino effect. what event we seen that you still believe is coming? >> the mortgage business is partly originatings new
4:43 pm
mortgages but also refinancing. the rise in the treasury bond yield and rise in mortgage rates hits refinancing market. it doesn't hurt the housing market. people have more money than they have. housing is affordable. people want to buy houses. the housing market will be final. it is only the refinancing part that is causing the layoffs. it maybe will hit bank profits but not the housing market. ashley: other areas that might be a of affected like wells fargo job losses? >> it might hit a few more mortgage originators but. the thing that the rising bond yields do though it bring as little volatility back to all markets. equities as well as bonds. and that's natural volatility. it is actually good to have that, if is too low people take too much risk, and that's not a good thing. liz: what about car loans? if we see the 10-year rise higher than 3% will we see
4:44 pm
effect on car loans? >> you will see a typical effect car line is five years. mortgage talks about 30-year. the fed is still anchoring interest rates on the short side at zero with the fed funds rate. they told us they will keep doing that well past the end of the asset buying program. so you know, car loans will maybe go up a teeny bit but you hardly notice. ashley: what about impact on investments like cds? >> cds are not going to move very much either because again they're anchoredded, shorter term, one year, two year or less they're anchored by the zero fed funds rate. that is not changing. liz: nor is the savings rate. ashley: that's true. liz: blue putnam, pleasure to have you. ashley: appreciate it. forget about the drone wars. unmanned aerial vehicles are coming to a neighborhood they're you and that could create some huge business opportunities. we'll talk to ceo's at the forefront of this cutting-edge technology. liz: plus the russians are coming.
4:45 pm
we'll tell you what happened when russian marines in gigantic hover craft storm ad beach with sun bathers. we're back in a moment. ♪ .
4:46 pm
4:47 pm
4:48 pm
4:49 pm
liz: breaking news out of silicon valley. we're getting more from treasury secretary jack lew. this is a live picture as he stands to leave the stage where adam lashinsky of fortune was asking him about the nasdaq market site trading glitch called the flash freeze, for more than three hours. as you heard 25 minutes ago, jack lew talking about, until there is full explanation we'll have to wait. but cybersecurity, quote, has been on my radar for some time. he did use the word intrusion, more whether that is a question of something we need to look at. apparently adam asked him who he believes, jack lew, believes might be the next federal reserve chair. and according to the quote that i'm seeing right now, jack lew saying, i will keep my advice in the oval office where it belongs on whether it would be yellen versus summers. our own peter barnes has reported over the past few
4:50 pm
days really larry summers to lose but don't count out janet yellen just yet. she is already at the federal reserve as one of members. from your battlefield to your neighborhood the drone industry is on a roll. the revolution, what are officially called unmanned aerial vehicles, uavs, is expected to grow the economy to create jobs. so is this a major investment opportunity? joining us somebody who believes it is. chris anderson, three dooe robotics. many people might know you having been big editor-in-chief at wired magazine. you finally looked at this and said i see real growth opportunity in these unmanned vehicles but let's talk about the broad appeal, ex-military because people get touchy about the military, correct? >> they do and rightly so. they think of drones as weapons and surveilance but they probably don't realize, they look like this. they're small. they're light.
4:51 pm
and they're increasingly cheap. cameras with wings. and we've seen cameras sort of populate the world. now they have the opportunity to populate skies too. liz: and do what? what sort of applications do you see ex-military? >> well interestingly the one thing people think of first is surveillance is lease likely. drones are not allowed at least in the united states to fly oaf built up areas. you can fly over your own backyard if you choose to do it but can't fly over other people's backyards. what is more likely to use gather data where people aren't. number one market is agriculture. farming is which is the biggest industry in the world. farm are is a big data problem without the big data. farmer don't have information on what is going on the crops because they are too big and too hard to get to. satellites are too far away. manned aircraft are too expense seven. the notion doing automated grid patterns over fields every day, gathering data,
4:52 pm
multispectrum data, different data every day you can compare growth cycles, this allows farmers to improve productivity, reduce chemical use, catch disease earlier. something you never think of yes exactly what cameras could be used for. >> hold it up again, the one you have in your hand. >> yeah. liz: tell us what kinds of drones are you developing? what are they made of? how far do they go and how high do they grow. >> sure. this is new one, iris. it is a quad copter. four propellers. you use a tablet to control it. you just, tap on the screen, tap on the map and tell it where to go. what makes the drone it is autonomous. it is capable of flying by itself. rather than having sticks and piloting although you can do that if you want, instead you do, tell it what you want to see. you control it the way you would, send it on a mission. so the act of being able to just simply, go here, look at that, or maybe draw a
4:53 pm
circle around a building or a farm or a field or, perimeter and say, you know, do that, that takes a lot of complexity out of the equation. this thing weighs, carry as go-pro camera. it has to be fixed and a gimbel that is stablized so it is very solid. just easy to use. liz: you've got some competitors out there. boeing is getting in the commercial drone business. you have guys like fred smith of fedex he would like to be using drones, i don't know if they are sort of electronic homing pigeons to deliver messages like during world war ii but in the end, chris, what venture capital interest you got in your company, let's say the name again, 3d rebottom ticks. >> thank you. we did venture-capital round last november, 5 million dollars round. we're doing another round right now. there is a lot of interest in the vc industry for specifically number of reasons. they see it as the future of
4:54 pm
aerospace and field of robots. there is the reason we're 3d robotics because the air is hard to reach. they see it as a big data opportunity. there are not a lot of investable opportunities out there. there are small number of startups, and big aerospace companies are targeted $100,000. this is $700. aerospace companies have hard time getting down to the consumer level. there is competition out of china and out of europe. the next three years i think we will see the market explode. liz: don't forget the toy market. hedge fund managers want them for their 13-year-old kids. >> this christmas. liz: chris, exactly. we wish you the best of luck from, we want our fellow journalists to do well. chris anderson, former editor-in-chief of "wired" magazine. now the ceo of 3d robotics. keep us posted, chris. >> thank you. ashley: you see the things flying in malls all over america.
4:55 pm
one guy -- little more sophisticated but very cool. a list of the least respected brands in america is out. can you guess which company took the top spot? one of the brands on your screen right now. we've got the answer next. ♪ copd makes it hard to breathe... but with advair, i'm breathing better. so now i can help make this a great block party. ♪ [ male announce ] advair is clinically proven to help significantly improve lung function. unlike most copd medications, advair contains both an anti-inflammatory and a long-acting bronchodilator working together to help improve your lung function all day. advair won't replace fast-acting inhalers for sudden symptoms and should not bused more than twice a day. people with copd taking advair may have a higher chance of pneumonia. advair may incrse your risk of osteoporosis se eye prlems.
4:56 pm
tell your doctor if you have a heart condition or high blood pressure before taking advair. ask your doctor if including advair could help improve your lung function. [ male announcer ] advair diskus fluticasone propionate and salmeterol inhalation powder. get your first prescription free and save on refills at advaircopd.com.
4:57 pm
4:58 pm
liz: let's go off the desk
4:59 pm
and imagine relaxing on the beach and seeing this. ashley: yikes. liz: massive hovercraft comes charging ashore. hundreds of russian sunbathers got the surprise of their lives when a 550 ton russian military hovercraft just lands on the beach. looks like a gigantic whale. the russian military said, we're just practicing amphibious landings, calmed down. seems no one bothered to warn the holiday makers. ashley: maybe they have the wrong beach? liz: bizarre. ashley: also "off the desk", brand consulting firm core brands released a list of least respected brand according to corporate executives. third place, h&r block. i get that. philip morris, cigarette folks, take third place. least respected brands, delta air lines. delta turned it around. liz: i'm fine with them. ashley: i'm am too. american airlines. liz: number one thing,
5:00 pm
january son hole, federal bank reserve might be. fed officials and economists come together. we're there rand discussing the global economy and official policy. ashley: ben bernanke, not there. melissa francis is next. melissa: wow a major market mess today. what if this was your company's very first week trading at nasdaq? that is exactly where we start the show right now. we have exclusive ceo of a company who just switched over from the nasdaq from the new york stock exchange last wednesday! can you imagine that? bob jones, ceo and president of old national bancorp. he is on the phone now with his reaction to all of and all of it being halted. bob, let me ask you, do you regret that decision, switching over? >> oh, not in the least. i think that you know the stock will trade tomorrow, traded yesterday and this is unfortunate glitch. as i said unfortunate, but

tv
FOX Business After the Bell
FOX Business August 22, 2013 4:00pm-5:01pm EDT

News/Business. Stock market updates. New.

TOPIC FREQUENCY Us 9, Jack Lew 8, Sec 6, Goldman Sachs 4, Schwab 4, America 4, Ashley 3, Chris Anderson 3, Harvey Pitt 3, Edgar Perez 3, Liz 3, The Treasury 3, United States 3, Cme 3, Liz Macdonald 3, Sandra Smith 3, Nicole 3, New York 3, Yellen 2, Adam Lashinsky 2
Network FOX Business
Duration 01:01:00
Scanned in San Francisco, CA, USA
Source Comcast Cable
Tuner Channel v761
Video Codec mpeg2video
Audio Cocec ac3
Pixel width 1280
Pixel height 720
Sponsor Internet Archive
Audio/Visual sound, color


disc Borrow a DVD of this show
info Stream Only
Uploaded by
TV Archive
on 8/22/2013
Views
46